EMV Chip Card Information for Merchants

Issuance of EMV

In October 2015 card providers started issuing EMV debit and credit chip cards. These cards have a built-in computer chip that provides cardholders and merchants an added layer of security against point-of-sale fraud.

The embedded chip allows a transaction to be processed in a safer way by issuing a unique, one-time code each time it is used. This action should mitigate counterfeit and card-present fraud that costs businesses and financial institutions billions of dollars each year.

For this heightened security to work for your business, you should consider a chip-enabled terminal that interacts with a cardholder's chip card to send the encrypted data across the payment network for verification and authorization.

Are merchants required to switch to chip-enabled terminals?

No, although it’s not a requirement it could be costly if you don’t. Effective October 2015, you could be held liable for the costs of a fraudulent transaction if the person paying at your terminal has a chip card but has to swipe the magnetic stripe on the back of the card to complete their transaction.

Here's how the chip card point-of-sale process works

Chip enabled terminal
  1. Cardholders insert their card, face up and chip end into the chip-enabled device.
  2. They leave the card in the device during the entire transaction.
  3. Instructions on the screen guide them through the transaction and they either sign their name or enter a PIN as needed. They remove their card and take their receipt when the transaction is complete.

The magnetic stripe hasn't gone away

Chip cards will continue to have a magnetic stripe on the back, which means they will continue to work in a 'swipe' terminal, but the payments industry is strongly encouraging merchants to switch to chip-enabled terminals.

Purchases online and by phone haven't changed

While chip cards and chip-enabled terminals combine to fight point-of-sale fraud, they don't change the online or over-the-phone payment process. Consumers will provide card information as they have done in the past.

More Questions?

EMV Merchant Frequently Asked Questions

 

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